Since 2012 a million small businesses have benefitted from audit exemption
Statutory audit exemption could save the average small business thousands of pounds every year, according to a new report from the Department for Business, Energy and Industrial Strategy (BEIS).
Statutory audits require organisations to submit financial records to government to ensure that no irregularities have taken place, allowing authorities to examine bookkeeping records and financial transactions.
In an attempt to cut red tape for small firms, government reforms to qualifying criteria have pulled over a million businesses out of statutory audit requirements.
In a statement, small business minister Margot James spoke of the benefits of audit exemption to eligible companies.
by increasing the number of businesses exempt from audit, more?[small business owners] are now able to reinvest in their businesses, increase cash flow and repay debts as a result of exemption take-up, she said.
Initial changes in 2012 meant that business owners only needed to meet two out of three qualifying criteria. Additional eligibility changes in 2016 updated the criteria to the following:
50 employees or fewer
Maximum 10.2m turnover
Maximum assets of 5.1m
The BEIS report claimed that audit exemption saved the average small business 4, 500, representing savings worth 4.6bn across Britain.
James added that audit exemption removed unnecessary burdens? restricting small business growth, and eight in ten small business owners surveyed for the study reported that they had saved time and money through audit exemption.
However, the research found that less than a third of newly eligible businesses had entered into the initiative, and James suggested that many more small firms could be waiting to make savings.
the number of businesses saving money from the new audit exemptions is already huge and I would encourage those who havent signed up to do so as soon as possible, she said.
